Employee Retention - Invest, Reward, Respect

The success of any budding or existing SME lies in its team of dedicated and productive employees working with it. As a management initiative, it is necessary to retain potential employees and reward them from time-to-time. A study has established that 62 per cent of SMEs face hurdles in recruiting and retaining staff over a period of time.

Invest in your employees
Often, companies invest in a wide amount of infrastructure to train their employees for better production and losing them because of a lack in retention skills can prove to be a big loss. SMEs especially need to prepare their HR processes to save themselves from losing valuable employees. Also, competitors do not hesitate in poaching potential workforce from other companies and may cause damage to the companies by offering their employees better incentives. 

Retain your employees with competitive wages

Competitive Wages
There are a number of ways in which an organization can retain their trusted employees. Paying competitive wages is one of the most important methods to hold existing employees. Also, providing your employees a reasonable amount of flexibility in their jobs can prove to be beneficial. A variety of benefits such as changes in schedule, fixed shifts, leaves for personal matters and family-supporting initiatives can also be crucial. Long-term employees need to be appreciated for their long service. Encouragement to them also proves to be a good example for other employees who realize that the company appreciates their commitments. Simple incentives such as health insurance, benefit packages could support them in making a decision to be with the original employer. It also offers the SMEs an additional advantage over the competition.

Respect your employee
Another key area in employee retention is respecting the employee and offering them space and support. Individualized work desks, promoting healthy relationships, and providing supportive trainings are some of the steps which can be taken by a company. Promoting interpersonal communication is also crucial for supporting existent and new employees. Various communication initiatives such as focus groups, attitude surveys, hotlines, etc. can help them in corresponding about their needs and requirements. A good employer must know what his employee wants. 

Make it transparent with your employee

Retention bonuses are another important step in retaining an employee. SMEs often face a lot of difficult situations such as mergers, acquisitions, financial difficulties, etc. It is vital in those times that companies release retention bonuses to support their employees and retain them. Also, it is better to release the amount over a period of time rather than pay it as a lump sum.

Managing a new hire
In worst cases, one may have to lose out on trusted employees and can benefit from new hires who would be more eager in their performance, would be cheaper to afford and can grow up to be a potential addition to the workforce. The only cons to a new hire would again be the question of reliability and standard requirements for training and nurturing which may take precious time of the employer. 

It is always difficult to find skilled workers and more so, in the times of a tough competitive market and financial meltdown. It always makes sense to retain one’s most effective workers.

Imperatives of skill development

Human resources are significant for the growth and development of SMEs and they should be managed well. It is extremely important to provide good training to employees. Every company has its own standards and so training employees is inevitable.  To save time and money, companies often tend to compromise on training of workers. It’s time to take this routine practice through a test.

Get the Industry In
Institutes are busy training people according to academia. It is time the industry steps in to tell the academia what they really require. Industries are now coming together with private universities to see how they can come together to develop a talented workforce that is employable. This has been a challenge so far and the attempts being made are few and far between.
 

Training on the Job
All leading companies train their workers because it is the single-most effective tool that has no substitute. Recruitment of the workers for white and blue collared ones is especially important and companies need to ensure that they are absorbed aptly into the company. Recruitment should be taken seriously and skilled HR capabilities should be employed to ensure right people are employed. 

Remunerating Well
People should be paid well and in accordance with their ability and skills. This not only ensures that they do a good job, it also means people stay with the company for a longer time. Of course, it is important to ensure that the person being recruited has a nice reputation and a good past record. Standards of recruitment should be high and competitive individuals should be given the right opportunities.    

What’s the Big Difference?
Say a company has sources technologically advanced machinery, but if the workers are not skilled and trained properly then the machinery would lie unproductive. So training of the employees is a must. They should go through training to hone their skills and to improve their performance. 

Human resources are the most powerful investment for any company. The workers should be managed intelligently and work should be assigned as per their capabilities. They should be encouraged to perform well for better productivity for the company and greater success for the person. Dedicated and hard working employees should be rewarded and they should be promoted with time. The training method should be interactive so that the employees can share their problems with the head. 

Unskilled workers are the biggest hurdle for the growth of a company. Therefore, they should be trained to generate more output and to meet their targets in a minimum time. The skilled work force tends to be more efficient and thus contributes in a big way to the advantage of the firm. Good workers add to the reputation of the company. It should be kept in mind that the employees who are given a healthy working environment are your biggest assets. 

Intelligent management of human resources is the key to success. A team of experienced and new workers should be engaged so that the freshers can learn. The leader should have a positive attitude to inspire workers to perform better and to the best of their ability. Adequate channelizing of resources makes it possible to reduce wastage and to raise turnover. So, skill development is crucial for the success of SMEs and a must-do for a productive tomorrow.

Expert Speak: Mr. Ajay Wahi

Recruit for productivity, not for numbers

You will reap rich dividends if you follow this learning to the hilt. A SME needs people who think out of the box, are creative, and are perfectionists. For all critical roles, you need the BEST. So, unlike in large organizations where recruitments are conducted by the dozen, I believe SMEs should recruit only the BEST for critical roles, even if that means some delays in the recruitment process. Do not fall into the trap of recruiting people just to increase staff size. Also, do not rush into recruiting people with lower than required skills just for the sake of delivering products faster. A product made by the best person, even if delayed due to late recruitment, would pose far fewer challenges than an inferior product developed fast by virtue of recruiting quickly the less-than-best person.

Invest time to hire the best

Recruiting the BEST is not easy. You need to make time and put in effort to take multiple rounds of interviews to identify the BEST to whom you will finally offer the position. So the first step is to mentally prepare yourself, your executive team, and others who will be involved in the interviewing process for a number of interviews. Without this mental preparation, you will probably rush through the interviews, and end up selecting someone out of sheer need to select a person. The chances are that such a person will not be the best! And if you don’t get the best, how will your organization become the best?

Streamlining of interview process

Next, you need to streamline the interview process. Ensure everyone is clear about who will conduct the first round interviews, who will participate in the second round, and so on. Often in SMEs, I have seen HR asking the department head what is to be done with short-listed candidates! You need to have complete company-wide clarity if you are planning to take many interviews, so that each step automatically leads to the next one, till the BEST person is selected.

Constitute crisp evaluation criteria

With the interview process set, one needs to chalk out very clearly the evaluation criteria to shortlist/select a candidate. This ensures that the company does not end up taking innumerable interviews without selecting a single candidate. I remember once we had taken over 100 interviews for a mid-level position and still had not made an offer despite a year having elapsed. At first, I was happy that so many interviews were being conducted, since that meant we were trying to hire only the best, till I actually ran through the evaluation criteria, only to be shocked to learn that no one was clear about them! The result: most candidates were short-listed at the first stage, and they were all rejected at the next stage! I then convened a meeting of the HR and various department heads and supervisors. We brainstormed to come up with clear and coherent evaluation criteria, and bang! We short-listed the right candidates and eventually made an offer to the best one.

Diverse interview panel

Depending upon the role you are recruiting for, your interview panel should be broad-based, because if so many interviews are to be conducted, and only a limited few conduct them, the panelists would be overloaded with interviewing duties. So expanding the pool from which the interview panel is chosen not only reduces the load on interviewers, but also motivates others to be good enough to be empanelled, creating a sense of pride and importance. Let’s face it: if the interview process and evaluation criteria are clear and well defined, you can conveniently delegate the interview process to lower levels of the hierarchy.

Collaborative recruitment effort

You can achieve all the above provided your leadership team and other seniors are with you on this journey to recruit the best .Get them together and ask them one question: Would they like to lead teams of many normally-skilled employees, or would they prefer fewer BEST-skilled ones so as to boost the quality of their teams? Most would choose the latter, where high earnings can be distributed among a smaller team of star performers rather than amongst a larger team of average employees. Someone said: A person is judged by the company s/he keeps. That is true for companies too.

To sum up, get the entire organization to realize that for critical roles, it is best to select only the BEST. Then, standardize the interview process, decide on key evaluation criteria, broaden the interview panel, and see interviewers take pleasure in their ability to select the BEST, rather than viewing the interviewing process as a liability.

Caution

You need to correctly identify critical roles before you can apply this learning.

It may take a few weeks to spread this vision across all levels of the organization.

Sum up

The interview process can be delegated to lower levels of the hierarchy. This would speed up the process and enhance quality of the recruit. Employees take pride in their ability to select the Best candidate(s) for the job, and have a personal interest in seeing their recruit succeed.

The contributor of this article is Mr. Ajay Wahi, author of management books like 'and the award for the BEST SME of the year goes to...' and 'Get Noticed Get Promoted'.

He can be contacted at 9810027979 or awahi2010@gmail.com

 

Expert Speak: Mr. Ajay Wahi

SMEs : Your time has come but only if you focus on your people

India will sparkle for the next many decades. Our time has finally come. From being considered a slow, closed economy for years, we are now viewed as one of the most promising countries globally. India is everywhere. No company in the world can succeed without an India office. Our people are more educated now, and they are more demanding than ever before. Our citizens now want the latest: the latest in technology, the latest in consumer goods, the latest in everything.

Indian Market: Huge Opportunity

And who will service the Indian market? The entire world will! All global companies, small or big, want to enter India. Sensing this huge business opportunity, millions will exhibit entrepreneurship, wanting to grab a piece of the huge cake that is the ever-growing Indian economy.

So far, it is the bigger players who have been at our service. But with millions of entrepreneurs entering the fray, it will be the small and medium set-ups (SMEs) which will flourish because they will propel the drive to quench India’s economic hunger. Whether these SMEs service large companies or the consumer directly, their success or failure will determine the degree of the country’s economic success. With high passion and a deep-rooted sense of belonging to a country whose time has come, these SMEs have every chance to succeed.  However, to succeed, the SMEs need lot of support and guidance on sales, finances, market penetrations, strategy, automation, IT, branding and finally on people.

Focus on PEOPLE

I highlight PEOPLE for one main reason: they are the common factor across all the above areas. It is people who conclude sales deals, who invent better machinery for higher production, who think and create strategy, and who create efficient processes. So if people are not happy, then the best of strategies is doomed to fail!

  

There is another reason why focus on people is very important. Besides the fact that they make things happen, people will gradually become a scarce resource. The time is not far away when people will have 100 options to chose from. And they will choose to work with you only if you have built for yourself the reputation of taking care of your people. This problem will be exacerbated by the mushrooming of SMEs which will create unprecedented demand for the limited skilled manpower we have in the country. As the icing on the cake, it is expected that in 10 years from now, all the advanced countries like US, Japan, Europe, and China will have either too many young people or too many old people. India, on the other hand, will have the largest productive population (24 to 45 years). And it is this productive population which will be sought after globally to fill up junior- and middle-level executive / managerial vacancies!

You may say 10 years is a lot of time - why bother about it? But building up a company takes time, and in the few years it will take you to build a reputation for yourself as a desirable SME to work for, you will find the 10 years considerably shortened. 

So, if you are running an SME, focus on people from today so that years from now when you grow even faster and want more people, these limited people choose to join you! 

And if you are part of the Government or a large corporate player or a reputed consultant or a effective trainer or an association etc, kindly do your bit to help out the SMEs on how recruit, train, retain people because they really need this guidance as they will succeed only if the can make people happy and productive. If their people win, they win and if they win, India wins.

The author of the article is Mr. Ajay Wahi, MD, Management Treasures Group and author of management books.